On 15 August, the US-based construction and development company and founder of the Anaklia Development Consortium (ADC), the Conti Group, announced that it is leaving the consortium, reported agenda.ge.

The reason for the abandoning of the project is the fact that so far no agreement had been reached between the government of Georgia and the project investor banks (EBRD, OPIC, ADB and AIIB). The government of Georgia prolonged the term for submitting financial documents for the consortium by six months. Now the government and the four donor banks have a six month period to agree on the last point of a series of eight demands, which asks the state to be the guarantor for the insurance of the freight turnover of the consortium. 

The eight demands were: 1) the clear establishment of the projects development phases; 2) the first phase of the project must be completed until 20 November 2020; 3) the conducting of feasibility studies of the phases; 4) an agreement on the so-called golden share, which requires from the Georgian state to have only one share with the consortium which develops the project; 5) the continuation of the terms, compensation or political force-major situations; 6) the construction of the road and railway by the government which would be connected to the port; 7) the state can only approve the amount of and the term of the loan agreements related to the project; 8) the termination of the contract and compensation regime in case of investor defaults.

Another reason of Conti Group’s withdrawal was the recent developments around the consortium founders from TBC Holding Mamuka Khazaradze and Badri Japaridze. The two were charged on 24 July by the Prosecutors Office of Georgia for laundering $16,754,000 and temporarily left their posts of the TBC Bank’s board of directors. 

The Ministry of Regional Development of Georgia issued a demand for the Anaklia Development Consortium to urgently find a new foreign investor instead of the American Conti Group. In a statement released on 17 August, the Ministry noted that Conti Group was the only member of the Anaklia Development Consortium, which met the tender conditions for the construction of the deep sea port in Anaklia. The statement also said that it is impossible to build the Anaklia port “without an experienced and financially strong strategic investor”; making the assumption that “the Georgian member of the Consortium will successfully build the Anaklia port [after Conti Group’s quitting] does not correspond to reality.” Nonetheless, the Ministry still expressed hope that by the end of 2019, the Consortium will submit agreements on attracting USD 520 million for the first phase of the construction.

According to the government officials, the withdrawal of the Conti Group was related to the financial and commercial interests of the company, noting that such shifts in the management of the ADC will have no negative influence on the development of the project. The CEO of the consortium, Levan Akhvlediani, emphasized the passive role of the Conti Group in the Consortium over the past few months. He noted that the American company left the Supervisory Board of the ADC in December 2018 and had remained in the project only as shareholders.

The Georgian political opposition commented on the decision of the American company, stating that the actions of the current government have led to the decline of US interest in Georgia and its potential. Roman Gotsiridze, from the United National Movement said that the government has been fighting the Anaklia Deep Sea Port project and that it will be responsible if this major initiative fails.